African vehicle financing fintech Moove has raised $23 million (R335 million) in series-A funding, which will be used to expand its operations in SA, Nigeria and Ghana.
The funding round was led by venture capital firms Speedinvest and Left Lane Capital, with participation from DCM, Clocktower Technology Ventures, LocalGlobe, Tekton, FJ Labs, Palm Drive Capital, Roka Works, KAAF Investments, Spartech Ventures and Class 5 Global, among others.
The Nigerian-headquartered start-up provides loans to its customers by selling them new vehicles and financing up to 95% of the purchase price within five days of sign-up.
The fintech embeds its alternative credit-scoring technology onto ride-hailing and e-logistics platforms, which allows access to revenue analytics of mobility entrepreneurs to underwrite loans.
Moove is e-hailing firm Uber’s exclusive vehicle financing and vehicle supply partner in sub-Saharan Africa, allowing drivers to pay back their loans over 24, 36 or 48 months, using a percentage of their weekly revenue.
According to the company, the funding will be used to build a full-service mobility fintech that democratises vehicle ownership across Africa.
“In a continent full of opportunity, mobility is key to moving economies forward, and this funding contributes to our ability to provide revenue-based financing as Moove empowers Africans to safely become mobility entrepreneurs,” says Ladi Delano, co-founder of Moove.
“We help people buy new cars who otherwise couldn’t afford them. And then, using the vehicle as a mobility entrepreneur, they’re able to earn money, which allows them to pay off the vehicle over time.”
Co-founders Delano and Jide Odunsi are British-born Nigerians, educated at the London School of Economics, Oxford University and MIT. They have successfully built three other businesses in Africa over the past eight years through their venture studio, Grace Lake Partners.
Delano is a serial entrepreneur while Odunsi is a former investment banker at Goldman Sachs and former management consultant at McKinsey.
Driven by a common passion to create shared value leveraging their extensive operating experience on the continent, the entrepreneurs say they set out to build Moove to provide Africans with a path to new vehicle ownership while creating new jobs.
In April, Moove partnered with Uber SA to launch the ride-hailing low-cost service UberGo to the local market.
After successful launches in Nigeria and Ghana, Uber’s local partnership with Moove enables local drivers on the UberGo platform to have access to a new Toyota Agya from R1 599 per week for rental, or for R1 950 per week for drive-to-own deals, covering maintenance and insurance – a deal that Moove claims is 25% less than what is offered by competitors.
Moove believes the market opportunity in Africa is vast – the continent is home to 1.3 billion people, with 43% living in urban areas. According to the company, in 2019, Africa had fewer than 900 000 total new vehicle sales compared to 17 million in the US.
“With Ladi and Jide at the helm of a world-class team, and their unique approach to vehicle financing, Moove has quickly established itself as one of the most exciting tech companies in Africa,” says Stefan Klestil, general partner at Speedinvest.
“The company’s expansion to three cities in under 12 months demonstrates the huge demand for vehicle financing in Africa, where just 5% of new cars are purchased with financing, compared to 92% in Europe.”